Petroleum marketers across Nigeria are reeling from financial losses following a fresh cut in petrol pump prices by the Nigerian National Petroleum Company Limited (NNPC), which dropped the cost of Premium Motor Spirit (PMS) to N880 per litre in Lagos and N935 in Abuja.
The decision, confirmed on Easter Monday, saw prices at select NNPC retail outlets fall from N925 in Lagos and N950 in Abuja. This reduction comes just days after Dangote Refinery adjusted its ex-depot petrol price from N865 to N835 per litre. In response, major distributors affiliated with Dangote — including MRS, Heyden, and Ardova — slashed their own retail prices to between N890 and N920 per litre across different regions of the country.
This fresh wave of cuts is fueling what appears to be a renewed price war between the state-owned NNPC and the private Dangote Refinery, Africa’s largest. For consumers, the competition is yielding lower pump prices, but for marketers, it is bringing severe financial strain.
Speaking with our correspondent, the National Vice President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Alhaji Hammed Fashola, acknowledged the price drop but decried the economic fallout for marketers.
“It is confirmed that NNPC has reduced PMS prices. It is now N880 per litre in Lagos. While this is good for the masses, marketers are losing money,” Fashola stated.
He explained that the NNPC had officially directed its outlets to update their prices, although many stations were still allowed to sell old stock at the previous rate to minimize losses.
According to Fashola, independent marketers have been caught in a precarious position — forced to offload previously purchased stock at a loss just to remain competitive and avoid being stuck with unsold inventory.
“We’ll have to reduce our own prices so the losses won’t be unbearable. But make no mistake, we are incurring losses. That’s the bitter truth,” he said.
While marketers suffer losses, consumers appear to be the biggest beneficiaries of the deregulated petrol market. The reduction in petrol prices comes at a time when Nigerians are grappling with high living costs, rising inflation, and foreign exchange volatility.
“The deregulation of the downstream sector is clearly working for the people,” Fashola admitted. “They are buying fuel cheaper, which is what the government envisioned. But it’s the marketers who are paying the price for that affordability.”
The Dangote Refinery’s aggressive price cuts are believed to be a direct response to the government’s decision to continue the controversial naira-for-crude oil swap deal. Under the arrangement, local refiners like Dangote are allocated crude oil in exchange for supplying refined petroleum products to the domestic market at reduced costs.
Industry watchers suggest that the price cut from Dangote, followed by NNPC’s reaction, is indicative of the stiff competition playing out in Nigeria’s liberalized petroleum industry.
No Predictable Floor Price
When asked whether fuel prices could drop further — potentially to N800 or even N700 — Fashola was cautious.
“I can’t predict prices. It depends on crude oil prices and the exchange rate. If crude drops to $50 a barrel, it will affect government revenue, inflation, and other macroeconomic factors. So we can’t be certain,” he noted.
Analysts say while the current price reductions may offer temporary relief to consumers, the long-term sustainability of such price wars remains uncertain. Many marketers are now calling for a structured buffer or incentive scheme to cushion the impact of sharp price drops and prevent business failures within the supply chain.
The deregulation of the petrol market, while welcomed by consumers, is gradually exposing the underlying vulnerabilities of small and independent marketers who are unable to keep pace with the pricing agility of larger refiners and state-backed entities.
For now, Nigerians will continue to enjoy lower petrol prices at the pump, but whether this trend will stabilize the market or deepen the divide between retail players remains to be seen.
